Core Viewpoint - The stock price of Zhaoyi Innovation (03986) surged over 17%, reaching a new high of 435 HKD, driven by positive market sentiment following Kioxia's strong earnings forecast, which highlights the growing demand for NAND flash memory in data centers due to AI applications [1] Company Summary - Zhaoyi Innovation is positioned as a platform chip design company benefiting from the convergence of three favorable trends: AI, domestic substitution, and an upward storage cycle [1] - The company is expected to achieve revenues of 9.203 billion, 11.386 billion, and 13.878 billion CNY for the years 2025, 2026, and 2027 respectively, with net profits projected at 1.610 billion, 2.589 billion, and 2.769 billion CNY for the same years [1] Industry Summary - Kioxia, a Japanese flash memory manufacturer, has released an annual earnings forecast that exceeds market expectations, indicating a significant shift in the NAND flash market driven by AI applications [1] - Kioxia plans to implement a revised pricing strategy for North American customers starting in Q1 2026, with an expected average selling price (ASP) increase of approximately 50% [1] - Morgan Stanley estimates that Kioxia's adjusted gross margin will reach 66% in the first quarter [1]